The G7 Summit and Education for Shared Prosperity

Today marks the beginning of the G7 Summit, during which the leaders of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, the President of the European Council, and the President of the European Commission will convene in Brussels to discuss matters of the global economy.

The Summit provides an important opportunity to examine the role of education policy in supporting the equitable growth of the global economy. Data show the link between the two is strong.

On average, a year of schooling is associated with a rate of return in terms of income growth of 10 percent a year. This is higher in low-income countries, demonstrating the need for further investment in education where the supply of schooling is scarce. Securing sustained prosperity hinges on growth, which depends on favorable policy change.

In a recent article published in advance of the 2014 Brussels Summit, Gaurav Tiwari and I propose that the G7 leaders can help countries identify and implement the best policy mix in education by facilitating the following three revolutions:

A data revolution: The availability of data will make policymakers more knowledgeable about the state of the various education systems, and more sensitive to their needs. This will also allow countries to assess existing policies and make the necessary interventions to ensure sustainable and shared prosperity.

An evidence revolution: The call for and use of more evidence of policies that make a difference will make a case for good governance. At the same time, the evidence-based practice would complement the readily available data, and also help policymakers contextualize the work in education.

A service delivery revolution: The right environment encourages innovation, risk-taking and evidence-based policymaking. The propensity for innovation and risk-taking can help growth become a norm, not just in developing countries, but all around the world. This is all done in the name of building better systems for shared prosperity and growth.

Education produces human capital with relevant skills, capable of helping to meet the challenges of economic growth and social equity. The distribution of skills in society is closely related to the distribution of income, and economic growth is strongly affected by the skills of workers. Since 1995, upper-secondary graduation rates have increased by an average of eight percentage points among OECD countries. Although graduation rates are not measured in terms of skills, the improved education performance has certainly contributed to producing the human capital that is central to meeting the challenges of society.

Again, according to the OECD, more than 75 percent of Norwegians have a paid job, compared with only 60 percent in Mexico. These figures are consistent with each country’s educational performance – only 36 percent of adults aged 25-64 have earned the equivalent of a high-school degree in Mexico, compared with 81 percent in Norway. The quality of education plays a significant role in the quality of employment. Students from developing countries score significantly lower in tests of cognitive achievement (such as PISA) than do students in high performing countries.

Students in high-performing OECD countries are graduating at a better rate than are students in low-income countries. Based on the OECD evidence alone, countries need to invest in education for sustained prosperity.

The lack of a fair distribution of skills in society is another factor contributing to overall inequality. Highly unequal income distribution, lack of access to education and poor-quality education for the poor aggravate the problem several fold. If access is inequitable, it diminishes the performance and compromises the social and economic benefits of schooling.

Enabling countries to use education for sustainable and shared prosperity is critical for development in today’s world. The three “revolutions” we suggest here are very much in the reach of world leaders, and a goal worth striving for.

Comments

Yes, there is a definite need to improve the graduation rates in developing countries. However, I do not think it is useful to compare Denmark and Mexico. These are very different countries. yes, it will be great if all countries can become like Denmark. What we need to talk about is what do we do in developing countries to fast track the skills set. For example, How does a country like Mexico or South Africa that have a lower number of graduates accelerate this process. What practical steps does one take to ensure there is progress in terms of graduation? Specific areas to target will be the Foundation Phase or early phase of school which some call the formative years. That is why it is difficult to compare Denmark and Mexico. Denmark has a more egalitarian approach and the formative years of children's schooling is relatively similar for the majority of children. One cannot say the same for South Africa and Mexico. So the education system should target the Foundation Phase in developing and poor countries. Other issues could be looked at is differentiation possibly earlier in the case of poorer countries. Research tells us that if a child does not learn to read by the age of 8 the possiblity of leaving school is high. Mexico and other developing countries have a number of children that struggle to read because they are not exposed to print or books in the early years. Consequently their oral language and vocabulary development is stunted. That is why you cannot compare Denmark and Mexico but Denmark is an excellent country which we all need to aspire to.

Thank you for the comment. It is not meant as a comparison in the sense that all developing countries can easily become just like the egalitarian high income countries of Europe over night. As you say, high performing countries such as Denmark or Norway in our example are aspirational examples. The real work as you say is to focus on the real needs of children in the early years. These are truly foundation years for children, and what they learn early in their schooling years will serve them well going forward. Developing and middle income countries are taking the right steps. As you say, they need to accelerate the process and reach as many children as possible with a high quality education early in life.